Factories are hiring new staff to keep up with rising demand as
The report showing factory activity growing ahead of expectations in June and at its fastest pace for seven months - with output in the second quarter increasing at the fastest pace for 20 years - helped lift the pound to its highest level since the onset of the financial crisis.
Separate figures showed output per worker and output per hour fell in the first quarter, raising questions over the sustainability of economic growth and dampening prospects that wage growth will recover.
Financial markets focused on the manufacturing report, however, and the pound gained about 0.25% to
Traders said the latest evidence that the
The business survey also showed domestic and overseas orders picking up and hiring at a 39-month high.
"June's PMI adds to other evidence that GDP growth may have picked up pace in the second quarter. We expect a quarterly expansion of around 1%, which would be the highest rate since 2007," he said.
But while signs that manufacturing was finally climbing back up to its pre-crisis strength after being hit hard in the recession were welcomed, official data on productivity was viewed as less upbeat.
In the nearer term the
"There is little scope for many employers to significantly increase wages, and the pressure on living standards, for many in the labour market, will continue," said
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